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State Legislature Increase Safe Lending Practices of Wisconsin Payday Loans Industry

Wisconsin State Map
Wisconsin State Map
Acquiring Wisconsin payday loans is a very safe and routine procedure thanks to the diligent efforts of the Wisconsin State legislature. With much of the negative press that the payday loans industry has been subjected to in recent years it is understandable that some would be a little apprehensive about acquiring a loan. However with the newly revised laws that have just recently gone into effect as of June 1st, payday loans are gaining the respect and acceptance of a wider selection of client from a more diverse economic back ground.

As things stand today the parameters for Wisconsin payday loans are pretty simple and straightforward. The maximum amount of a loan stands at 1500 dollars. The term of the loan must be a minimum of two weeks or 30 days. and as a resident of Wisconsin you also have the option of doing it by way of ACH transactions. The on a payday loan is not to exceed 36 percent annually according to state law.

Statutes 138.10 and 138.14, sponsored by Rep. Pasch of Wisconsin state house further stipulates that no licensee shall make a payday loan that requires a payment that is more than twice as large as the average of all other scheduled payments. A licensee cannot make a payday loan where the lender accepts, and agrees to hold, more than 5 of a customer’s checks, and the loan cannot be secured by an interest in a motor vehicle. No licensee under these statutes shall make a loan of $1,500 or less that requires payments be made on any schedule other than substantially equal to biweekly installments or substantially equal monthly installments that has a term of less than 90 days. The state is putting forth an effort to alleviate lenders from exceeding these parameters by adopting these statues because the legislators of the state of Wisconsin believe that these rules are in the best interest of their constituency.

Wisconsin State Flag
Wisconsin State Flag
For providing Wisconsin Payday loans the state has also placed stipulations on how licensed lenders are to calculate a client’s gross monthly income. The gross monthly income calculation shall be calculated by multiplying the amount of the:

  • Gross weekly earnings times 4.33, if the customer is paid weekly.
  • Gross two week earnings times 2.16, if the customer is paid every two weeks.
  • Gross semi-monthly earnings times 2, if the customer is paid twice a month.
  • Gross monthly earnings times 1, if the customer is paid monthly.

It was necessary to specify the manner in which calculations would be made in order to set permanent guidelines to prevent the manipulation of pay rates on an individual client basis. These statutory calculations assure that a borrower has a clear cut idea as to what they are required to pay for their particular pay situation. Before the lender grants a payday loan to a borrower, they must first obtain from them A recent official pay stub or official payroll receipt.

A current receipt showing payment of retirement benefits (if applicable ;) a current receipt showing payment of a government benefits (again if applicable ;) a current statement from a financial concern reflecting your receipt of a direct deposit of government benefits, and any other documentation as approved. Having had reported cases in which lenders have required borrowers to bring in much more documentation than what was really necessary to secure the type of loan that they were looking for. Many borrowers felt very uncomfortable with the process and believed that their personal privacy was being invaded for the sole purpose of securing a small loan. Wisconsin legislators shared that sentiment with its constituency and addressed the situation by creating parameters to help guard the financial privacy of its constituency as well as to create a higher level of integrity in the lending process.

Wisconsin payday loans
Wisconsin payday loans
Unfortunately there are incidents in which things happen to borrowers that cause them to not pay back their loan in a timely manner; for this reason legislators have put in place this statue to address these concerns as well. If the customer fails to repay the, an offer of the repayment plan is required by s.128 138.14(11g), Stats. This statute decrees that an offer of repayment shall be hand-delivered, mailed or e-mailed to the customer when the lender receives notice of insufficient funds in the customer’s account or within 10 days after the maturity date of the loan. The offer of repayment plan shall be in a single written document in a form prescribed by the division. The lender may deposit the customer's check or initiate the authorized electronic fund transfer within the 10 day period.

Wisconsin Payday loans statutes require that the repayment plan agreement be in writing and shall contain the following guidelines:

  • The repayment plan must not have any void spaces.
  • The repayment plan must contain a signature and be dated by the borrower and a representative of the licensee.
  • The repayment plan must clearly contain all of the contact information of the lender.
  • The repayment plan should identify the name, address, telephone number, and unique identification number of the customer.
  • The repayment plan should state the date that the repayment plan was created, along with the loan number, and the outstanding balance of the loan.
  • The repayment plan needs to state the payment amounts and due dates.
  • The repayment plan must contain a summary of action that could be taken against the customer if the customer does not make the required repayment plan installment payments when due.
  • The repayment plan must stipulate that the lender shall furnish the customer a copy of the signed agreement.
  • The repayment plan requires that the licensee shall retain a copy of the repayment plan agreement in the customer’s file.

As you can see the Wisconsin payday loans statutes are very comprehensive when it comes to establishing the rules and guidelines necessary to assure that the people of the state of Wisconsin can obtain payday loans with the greatest of assurances.